Monday saw a bounce-back in soybean and canola prices, repairing much of the damage suffered Friday in the post-Brexit shock.
But other crops remained weak, with corn and wheat prices still in the depths of the losses that have been incurred since mid-June. Markets this week will be positioning ahead of the seeded acreage reports from Statistics Canada on June 29 and the U.S. Department of Agriculture on June 30.
Overall, it’s hard to see any direct bias in crops resulting from the United Kingdom’s surprise vote to leave the European Union, known as Brexit.
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“You get these little whirlwinds where crops get sucked in with everything else, but at the end of the day the fundamentals win out, even if it gets noisy in the interim,” said Jon Driedger, analyst with Farm Link Marketing.
“You get this situation where everything kind of gets dumped in the knee-jerk reaction. Grains got caught in that.”
The surprise Brexit vote in favour of leaving the EU shocked markets, causing stock markets to swoon, oil to slump, gold to soar and other commodities to jerk around.
Crops appear to be in the jerking-around category, becoming volatile but having no clear bias other than the recent weakness that has beset the formerly rallying commodity class.n
On Friday, crop market mostly fell with other commodities, but Monday oilseeds staged a strong comeback, although soybeans recovered much more than canola. Long term weather reports also supported soybeans. Some models show a return to hot weather in mid July in the U.S. Midwest, which could stress crops.
Driedger said crop markets are different from a safe haven commodity like gold or an economic-growth-related commodity like oil.
People won’t necessarily buy more or less of the crops because of the Brexit.
“So the UK’s in the EU or not in the EU. How does that really impact on corn demand?” said Driedger.
“Nothing’s changed that much.”
Crop markets however, were indirectly affected by Brexit’s effect on currency values, that saw the euro and pound fall and the U.S. dollar rise, recognizing its image as a a safe haven in economically uncertain times.
The surging U.S. dollar hurt crop futures denominated in the greenback.
Wheat’s weakness Monday was encouraged by reports of good winter wheat yields in Kansas.
Contact ed.white@producer.com
Light crude oil nearby futures in New York were down $1.31 to US$46.33 per barrel.
The Canadian dollar at noon was US76.46 cents, up from 77.21 cents the previous trading day. The U.S. dollar at noon was C$1.3078.
Brexit uncertainty continued to weigh on stock markets, particularly on shares of financial institutions.
The Toronto Stock Exchange’s S&P/TSX composite index ended down 202.09 points, or 1.45 percent, at 13,689.79,
The Dow Jones industrial average fell 260.51 points, or 1.5 percent, to 17,140.24, the S&P 500 lost 36.87 points, or 1.81 percent, to 2,000.54 and the Nasdaq Composite dropped 113.54 points, or 2.41 percent, to 4,594.44.
Winnipeg ICE Futures Canada dollars per tonne
Canola Jul 2016 470.00 +5.80 +1.25%
Canola Nov 2016 483.30 +6.40 +1.34%
Canola Jan 2017 490.10 +7.50 +1.55%
Canola Mar 2017 495.90 +7.50 +1.54%
Canola May 2017 500.40 +7.50 +1.52%
Milling Wheat Oct 2016 219.00 +3.00 +1.39%
Milling Wheat Dec 2016 224.00 +3.00 +1.36%
Durum Wheat Oct 2016 292.00 +2.00 +0.69%
Barley Oct 2016 171.50 unch 0.00%
Barley Dec 2016 171.50 unch 0.00%
American crop prices in cents US/bushel, soybean meal in $US/short ton, soy oil in cents US/pound
Chicago
Soybeans Jul 2016 1133.00 +23.75 +2.14%
Soybeans Aug 2016 1129.75 +22.75 +2.06%
Soybeans Sep 2016 1114.00 +22.25 +2.04%
Soybeans Nov 2016 1104.75 +21.00 +1.94%
Soybeans Jan 2017 1101.50 +20.75 +1.92%
Soybeans Mar 2017 1064.75 +12.75 +1.21%
Soybean Meal Jul 2016 384.00 +6.10 +1.61%
Soybean Meal Aug 2016 385.00 +6.00 +1.58%
Soybean Meal Sep 2016 383.40 +5.90 +1.56%
Soybean Oil Jul 2016 31.26 +0.18 +0.58%
Soybean Oil Aug 2016 31.40 +0.18 +0.58%
Soybean Oil Sep 2016 31.53 +0.17 +0.54%
Corn Jul 2016 385.25 unch 0.00%
Corn Sep 2016 389.25 -0.75 -0.19%
Corn Dec 2016 394.25 -0.75 -0.19%
Corn Mar 2017 401.00 -1.00 -0.25%
Corn May 2017 405.00 -1.75 -0.43%
Oats Jul 2016 204.00 -6.25 -2.97%
Oats Sep 2016 198.25 -1.75 -0.88%
Oats Dec 2016 200.75 -5.00 -2.43%
Oats Mar 2017 213.75 -5.25 -2.40%
Oats May 2017 213.75 -5.25 -2.40%
Wheat Jul 2016 446.75 -8.25 -1.81%
Wheat Sep 2016 458.25 -7.00 -1.50%
Wheat Dec 2016 478.00 -7.00 -1.44%
Wheat Mar 2017 495.50 -7.25 -1.44%
Wheat May 2017 505.50 -7.50 -1.46%
Minneapolis
Spring Wheat Jul 2016 506.50 -11.75 -2.27%
Spring Wheat Sep 2016 514.75 -12.00 -2.28%
Spring Wheat Dec 2016 530.25 -11.00 -2.03%
Spring Wheat Mar 2017 544.25 -11.00 -1.98%
Spring Wheat May 2017 552.25 -11.00 -1.95%
Kansas City
Hard Red Wheat Jul 2016 412.75 -11.25 -2.65%
Hard Red Wheat Sep 2016 431.25 -10.75 -2.43%
Hard Red Wheat Dec 2016 457.00 -10.50 -2.25%
Hard Red Wheat Mar 2017 473.50 -10.50 -2.17%
Hard Red Wheat May 2017 484.00 -9.25 -1.88%
Chicago livestock futures in US¢/pound
Live Cattle (P) Jun 2016 115.92 +1.42 +1.24%
Live Cattle (P) Aug 2016 112.02 +1.17 +1.06%
Live Cattle (P) Oct 2016 112.30 +1.52 +1.37%
Feeder Cattle (P) Aug 2016 140.18 +0.53 +0.38%
Feeder Cattle (P) Sep 2016 139.25 +0.87 +0.63%
Feeder Cattle (P) Oct 2016 137.88 +0.76 +0.55%
Lean Hogs (P) Jul 2016 83.15 -0.75 -0.89%
Lean Hogs (P) Aug 2016 83.50 -1.30 -1.53%
Lean Hogs (P) Oct 2016 71.13 -0.47 -0.66%
